U.S. firms are carrying most of the tariff cost for now, holding prices steady and shrinking margins.
“American businesses have been absorbing Trump’s tariffs so far, but eventually the burden will be shifted on to American consumers” — Fed Chair Powell
It looks like Trump made a mistake https://t.co/P25q5bjEba
— sandile swana (@sandileswana) July 31, 2025
Powell warned that goods-price inflation will pick up over summer as higher tariffs reach consumers.
“Ultimately the cost of the tariff has to be paid, and some of it will fall on the end consumer”
https://www.reuters.com/business/feds-powell-says-he-expects-see-more-tariff-driven-price-hikes-coming-months-2025-06-18/
Corporate earnings at GM, P&G and smaller importers show profit pressures from tariffs where few markups occur now. Revenue from tariff collections rose to about $124 billion by July 31, a record increase over last year’s intake. A Reuters‑surveyed corporate CFO said most firms plan to raise consumer prices within months once inventories turn over. Household real income has stalled even while headline CPI has climbed to 2.7 percent, suggesting limited consumer buffer going forward. The lag between tariff imposition and retail price transmission remains under‑examined in public commentary. Firms delay price hikes to maintain market share, but margins thin incrementally. If businesses abandon absorption, sticker shock may appear more sharply later in 2025.